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Expanding Mongolia’s Export Opportunities through GSP. Office of the U.S. Trade Representative March 2007. Today’s Discussion. U.S. imports from Mongolia’s under GSP Mongolia and the Generalized System of Preferences (GSP) Program

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expanding mongolia s export opportunities through gsp

Expanding Mongolia’s Export Opportunities through GSP

Office of the U.S. Trade Representative

March 2007

today s discussion
Today’s Discussion
  • U.S. imports from Mongolia’s under GSP
  • Mongolia and the Generalized System of Preferences (GSP) Program
  • How to increase Mongolia’s use of GSP duty-free opportunities
gsp program
GSP Program
  • Created by Congress in 1974; renewed through 2008.
  • Creates opportunities in 134 countries, while expanding choices for U.S. industries & consumers.
  • Provides duty-free treatment for 3,400 products for all, plus 1400 more products from LDCs.
  • GSP imports increasing: $32.6 billion in 2006, up 22% over 2005.
u s imports from mongolia under gsp in 2006
U.S. Imports from Mongolia Under GSP in 2006
  • 530,116 (227% increase over 2005)
  • 5 types of products
  • Small amount of all U.S. imports from Mongolia (0.5% of $113m)
  • Mongolia’s GSP utilization 58% of potential benefits in 2006. (GSP overall average is 71%).
u s imports from mongolia under gsp 2006
U.S. Imports from Mongolia Under GSP (2006)
  • Tungsten concentrates (MFN rate: 1.7%): $367,176
  • Plastic hangers (3%): $146,614
  • Plastic household and toilet articles (3.4%): $14,173
  • Plastic articles of apparel & accessories (5%): $2,804
  • Headgear of fur (3.3%): $349
which products are eligible for duty free gsp treatment
Which Products are Eligible for Duty-Free GSP Treatment?
  • Eligible: most dutiable manufactures and inputs for manufactured items; certain agricultural, fishery, and primary industrial products (metals, chemicals, derivatives).
  • Not eligible: certain textiles, watches, certain footwear and handbags, luggage, flat goods not made of silk, work gloves, and certain leather apparel.
how exports qualify for gsp duty free treatment
How Exports Qualify for GSP Duty-Free Treatment
  • On list of GSP-eligible articles.
  • Imported directly from Mongolia or pass through another country in a sealed container.
  • Be growth or product of Mongolia, or if product uses imported inputs, product must meet 35% value-added and transformation rules.
  • An “A”, “A+”, or A* is written before the tariff number on U.S. customs form.

A: from all beneficiaries; A+: from LDCs; A*: one or more countries excluded from GSP treatment.

rules of origin
Rules of Origin
  • Sum of imported materials’ cost or value, plus direct costs of processing, must equal at least 35% of the product’s value when sold into the United States.
  • Imported inputs must be “substantially transformed” in Mongolia to produce or manufacture the product. “Substantially transformed” means the U.S. would classify them as different items.
ensure gsp duty free entry into the u s
Ensure GSP Duty-free Entry into the U.S.

Importer must place an “A,” “A*,” or “A+” in front of the HTSUS tariff number on the summary U.S. customs entry form, Line 27.

increasing use of gsp benefits
Increasing Use of GSP Benefits
  • Ensure products are getting GSP duty-free treatment when eligible.
  • Increase exports of GSP-eligible textile and apparel products.
  • Identify Mongolia’s exports to other countries that are GSP-eligible.
  • Identify other potential exports
  • Enter into a certified handicraft arrangement.
ensure gsp treatment is claimed for all eligible products
Ensure GSP Treatment is Claimed for All Eligible Products
  • U.S. imported $912,435 in GSP-eligible products from Mongolia in 2006.
  • BUT, $382,319 (42%) of those imports (19 product categories in 2003-2006) did NOT receive GSP duty-free treatment.
  • Maybe products didn’t meet rules of origin
  • But if they did – importers paid duties as high as 7% (national flags) unnecessarily.
gsp eligible imports with largest trade but lowest percentages claimed under gsp
GSP-eligible Imports with Largest Trade but Lowest Percentages Claimed under GSP
  • Certain plastic articles for packing goods, including sacks and bags (MFN Rate 3%): 50.3% of $290,000 in U.S. imports
  • Plastic articles of apparel and accessories (5%): 21.6%of$13,000 in U.S. imports
  • Wool or fine animal hair fibers (0.7%): None of the $45,600in U.S. imports
  • Parts of gas and electricity meters (3.2%): None of $75,600 in U.S. imports
  • Parts of electrical machines (2.6%): None of the $35,000 in U.S. imports
increase gsp eligible textile and apparel exports cashmere
Increase GSP-eligible textile and apparel exports: cashmere
  • 51031000: Noils of wool or of fine animal hair (0.4%)
  • 51032000: Other waste of wool or of fine animal hair, (2.6 cents per kg)
  • 57025120: Floor coverings (hand-woven and not of pile construction) (4.3%)
  • 57031020: Tufted hand-hooked carpets & other floor coverings of wool or fine animal hair (6%)
  • 51161008: Sports gloves, mitts, and mittens (2.8%)
increase gsp eligible textile and apparel exports cashmere14
Increase GSP-eligible textile and apparel exports: cashmere
  • 63049940: Certified hand-loomed and folklore wall hangings of wool or fine animal hair
  • 63049910: Certified hand-loomed and folklore pillow covers of wool or fine animal hair
  • 65069900: Headgear of materials other than rubber, plastics, or furskins, whether or not lined or trimmed
increase gsp eligible textile and apparel exports fur
Increase GSP-eligible textile and apparel exports: fur
  • 65010060: Hat forms, bodies and hoods of fur felt for women or girls
  • 65069200: Headgear of furskin, wether or not lined or trimmed 
increase gsp eligible textile apparel exports cashmere blend
Increase GSP-eligible textile & apparel exports: cashmere blend

These products would have to, according to the HTSUS product description, contain 70% or more of silk or silk waste, so technically could be blended with up to 30% or less cashmere:

  • 61171040  Shawls, scarves, etc. knitted or crocheted, containing 70% or more by weight of silk or silk waste
  • 61178085  Headbands, ponytail holders & similar articles, of textile materials other than containing 70% or more by weight of silk knitted or crocheted
  • 62131010  Handkerchiefs, not knitted or crocheted, containing 70% or more by weight of silk or silk waste
increase gsp eligible textile apparel exports cashmere blend17
Increase GSP-eligible textile & apparel exports: cashmere blend
  • 62141010  Shawls, scarves, mufflers, mantillas, veils and the like, not knitted or crocheted, containing 70% or more by weight of silk or silk waste
  • 62171085  Headbands, ponytail holders & similar articles, of textile materials other than containing less than 70% by weight of silk knitted or crocheted
  • 62043960  Women’s or girls’ suit-type jackets and blazer, not knitted or crocheted, containing 70% or more by weight of silk or silk waste
  • 62044910  Women’s or girls’ dresses, not knitted or crocheted, containing 70% or more by weight of silk or silk waste
consider exporting more products to the u s duty free under gsp
Consider exporting more products to the U.S. duty-free under GSP

Mongolia exports these U.S. GSP-eligible products to the EU and Japan, but little or none to the U.S.:

  • 611693: Certain knitted/crocheted synthetic fiber gloves and mittens (9.7%)
  • 640590: Disposable footwear (8.2%)
  • 630499: Non-knitted/non-crocheted textile wall hangings and pillow covers (7.5%)
  • 382311: Stearic acid (for soaps, cosmetics, candles, oil pastels) (7.0%)
  • 390760: Polyethylene terephthalate (raw material for manmade fibers) (6.5%)
  • 390610: Polymethyl methacrylate (glass substitute) (6.3%)
consider exporting more products to the u s duty free under gsp19
Consider exporting more products to the U.S. duty-free under GSP
  • 280469: Silicon (5.4%)
  • 430230: Tanned/dressed whole or pieced fur skins (5.3%)
  • 340211: Certain organic cleaning agents (4.7%)
  • 392690: Plastic buckets, pacifiers, boat parts, handbags, fake gemstones, slide mounts, belts, clothespins, inflatables, document binders, etc. (2.8-6.5%)
consider exporting more products to the u s duty free under gsp20
Consider exporting more products to the U.S. duty-free under GSP
  • 441820, 441900, & 442190: Wood doors, tableware, kitchenware, blinds, shutters, ice cream sticks, etc. (3.1- 4.8%)
  • 720299: Ferroalloys (4.7%)
  • 848180: Pipe taps, valves, etc. (3.7%)
  • 850780: Storage batteries (3.4%)
  • 410791: Certain bovine leather (3.2%)
  • 210410: Soups, broths & prep (3.2%)
  • 711790: Misc. imitation jewelry (3.2%)
  • 510320: Noils & other wool/fine animal hair waste (3.0%)
consider exporting industrial products to the u s duty free under gsp
Consider exporting industrial products to the U.S. duty-free under GSP
  • Copper ores, concentrates, oxides, sulfate and products of copper
  • Tungsten concentrates, oxides, products
  • Ash and residues containing mainly zinc or tungsten
  • Distillates of high-temperature coal tar
  • Molybdenum: oxides, chemical mixtures, bars, rods, wires, planes, chisels
  • Tin: chemicals, alloys, many products
  • Gold: compounds and jewelry
export mongolia s competitive gsp eligible products in the u s market
Export Mongolia’s competitive GSP-eligible products in the U.S. market
  • Bovine and equine leather
  • Copper ores and concentrates
  • Gold in semi-manufactured forms
  • Other minerals (earlier slide)
  • Preserved meat and offal of bovine animals
  • Raw hides and skins of bovine/equine animals
  • Wool, not carded or combed
  • “Food, beverages, and tobacco”
conclude gsp certified textile handicraft arrangement
Conclude GSP Certified Textile Handicraft Arrangement
  • Certain textile hand-loomed and folklore products will become eligible for GSP duty-free treatment:
    • wall hangings
    • pillow covers
    • certain textile floor coverings
  • How? When U.S. and Mongolia complete the exchange letters that indicate Mongolia will provide necessary certification (stamp by identified individuals) that items are hand-made and folkloric.
for further information
For Further Information

Office of the U.S. Trade Representative Website:

GSP guidebook, lists of GSP-eligible and ineligible products, notices:

  • http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index.html
for further information25
For Further Information

U.S. Tariff Schedule:

  • http://www.usitc.gov/tata/hts

Department of Homeland Security: Customs & Border Protection: http://www.customs.gov/xp/cgov/import/

    • Customs Entry Form 7501: https://forms.customs.gov/customsrf/getformharness.asp?formName=cf-7501-form.xft
    • http://www.customs.treas.gov/xp/cgov/toolbox/publications/
for further information26
For Further Information

Potential exports to the U.S. and elsewhere:

  • http://www.intracen.org/menus/countries.htm